IBAFrame: A value driven approach for IT projects

Many companies and institutions perceive difficulties with the information technology (IT) push of the last decades. Investments in new IT solutions suffer from poor results. As a cure for the raised problems caused by the technology push, this article introduces IBAFrame. IBAFrame stands for IT (or Innovation) Benefits Accelerator Framework. For value creation IBAFrame supports alignment and connection from a result point of view and a process point of view.

Transcript of "IBAFrame: A value driven approach for IT projects"

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2 Value = (Align + Connect)IBAFrame: A value driven approach for IT projects and IT related organisational change Leon Dohmen July 2011 Many companies and institutions perceive difficulties with the information technology (IT) push of the last decades. Investments in new IT solutions suffer from poor results. As a cure for the raised problems caused by the technology push, this article introduces IBAFrame.IBAFrame stands for IT (or Innovation) Benefits Accelerator Framework. For value creationIBAFrame supports alignment and connection from a result point of view and a process point of view.

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Value = (Align + Connect)2IntroductionMany companies and institutions perceive difficulties with the information technology (IT)push of the last decades. Investments in new IT solutions suffer from poor results. Not seldomnew IT solutions are implemented via a special (temporary) work construction: an IT project.Two main reasons can be appointed as main causes for the poor results:1. From a result perspective: IT projects focus (too much) on technology only;2. From a process perspective: IT projects act (too much) as an island disconnected from the rest of the organisation.As a cure for the raised problems caused by the technology push, this article introducesIBAFrame. IBAFrame stands for IT (or Innovation) Benefits Accelerator Framework.IBAFrame is a (new) framework that provides insights and instruments that supportsorganisational change driven by IT. A long-term period – over ten years – of research hasestablished the foundation of the framework. Many cases and projects in public and privateinstitutions and organisations have been analysed. Cases like mergers, setting up a sharedservice centre, implementations of new IT solutions and outsourcing of IT services.Result perspectiveFrom a result perspective IBAFrame is supported by the TOP-concept.1 Different worlds fuseinto one is the credo of TOP and involves Technology, Organisation and People (figure 1). Figure 1: Context and consistency of technology, organisation and people Technology (TOP-mix) • Applications • Middleware • Infrastructure People Organisation • Attitude • Processes • Knowledge • Structure • Skills • LocationTechnologyThis is the offering of available technology (infrastructure, middleware, applications) and itspossibilities, limitations and impossibilities. Even when limited to the domain of IT theoffering is enormous. A technology that turns several industries upside down is the Internet.Internet has made it possible to create a virtual world (V-world) besides the physical world.The meaning of terms like place, time and presence has drastically changed in the V-world.1 TOP-change for the fifth technology revolution: http://www.slideshare.net/ldohmen/topchange-for-the-fifth-technology-revolution 2

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Value = (Align + Connect)2OrganisationOrganisations apply IT to support their corporate objectives. IT gives organisations almostunlimited possibilities to reshape business processes and organisation structure (includinglocation). Due to the shortening of life cycles of available IT, absorbing new IT has to be akey capability to transform and adapt quickly to changing circumstances.PeopleNew IT solutions change the content of work and collaboration between employees inside andoutside the own organisation. A proper attitude and stimulation of learning processes areimportant to quickly build up new knowledge and skills. Learning processes have to be tunedon individual preferences and capabilities. Related to the affinity with IT, digital nativesversus digital immigrants is a popular way to distinguish between (generations of) people.Food for thought: Limited viewsThere is a permanent interaction in the context of technology, organisation and people (TOP-mix). Each TOP-mix contains its own dynamics and unpredictability. Results are neverabsolute. Here is where the most views that the various professional fields and studies havedeveloped go wrong. Many of these views about how change can best be carried out limititself to one or at most two domains of the TOP-mix. Psychologists, sociologists andbehaviour scientists point to the importance of the people factor and the developing of correctbehaviour. IT project managers restrict their project to the technology domain only. Most ITproject managers have no idea what takes place outside of this domain. Organisation scientistsespecially evaluate processes and structures and explain which organisation form is mostappropriate for an organisation. Each view from a separate field of study or profession isincomplete and without insight in the required contribution of and interaction between otherdomains, only a partial solution can be offered.Each implementation of a new IT solution impacts the alignment and connection of theexisting interplay of TOP. Approaching the implementation of the new IT solution with TOPprevents a narrow-minded focus on e.g. technology only. This result perspective is the firstpart of alignment and connection to create value: Value = Align + Connect.Process perspectiveToday’s projects build tomorrow’s organisation. Classical (project) management methods,developed for an era in which IT was less dominant do not evolve quick enough to take on theproblems of poor results of IT projects. The professionalization of the discipline has lead toexaggeration of the attention for instruments, milestones and time schedules withoutemphasizing what is key for projects: the absorption of the project result. From a processpoint of view IBAFrame arranges the alignment and connection by involving:- changes of the IT solution itself; this could be a change of an existing IT solution or the implementation of a new IT solution (IT project);- changes in the work domain of users of IT (user organisation or demand side of IT);- changes in the work domain of IT support (IT organisation or supply side of IT).IBAFrame involves all three subsections and their mutual influencing and dependencytherein. Continuous alignment and connection are required to have the subsections mutuallyjoin each other perfectly well, in order to ensure that innovation or change in which IT is 3

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Value = (Align + Connect)2dominant becomes successful. To arrange this alignment and connection IBAFrame providessix key principles. First two principles are positioned at organisation level, principles threeand four are linked to group level. The last two principles are on individual level.1. Shared view and direction including insight in complexity and impact;2. Fitting change approach tuned on the complexity;3. Commitment and collaboration based on realistic targets and timeframes;4. Stimulation of learning processes to support the absorption of the new IT solution;5. Proper attitude to support a pro-active contribution;6. Necessary competences of technology, organisation and people aspects.The six principles arrange the alignment and connection on the different levels oforganisation, group and individual: therefore corporate objectives are linked to group andindividual objectives. The IBAFrame process perspective is the second part of alignment andconnection to create value: Value = Align + Connect.Research and foundationApplying TOP and IBAFrame in a proper way from a result and process point of view can berepresented by the ‘formula’: Value = (Align + Connect)2.Applying the concepts of IBAFrame and TOP is not such a tip or trick. Necessarycompetences are required to understand and to arrange an optimum in alignment andconnection for value creation. The foundation of the first concept has been in 1999. Thefoundation was initiated by a case study related to a thesis for an IT auditing study. In theyears after the concept has been developed further by applying it in multiple practices. Oncase level for two cases it could be concluded working according the IBAFrame principlesleads to an increased value (result) of 8% (merger and acquisition case) and 44% (sharedservice centre case). Experiences, learned lessons and gained insights from differentprofessional fields like project management, change management, IT auditing and educationalinstitutions have stimulated further development and the launch of the current IBAFrameconcept in the publication ‘Regie voeren over organisatieverandering met ICT’2 (2008, Dutchlanguage) followed by the publication ‘Changing IT in six’ 3 (2010, English language).A generic modelLatest insights on the IBAFrame concept are expressed in the research ‘Leading principles forIT related organisational change’.4 In this research of 46 IT projects (and/or situations) 5 therelation between the way of steering (change-ability) and the achieved result are expressed ona scale from 1 (very poor) to 10 (excellent). The average score result represents theIBAFrame result perspective. The result expresses sub-areas like:- result is an improvement;- result fits the objective;- result coincides with the expectation;- result is properly absorbed.2 Regie voeren over organisatieverandering met ICT: http://www.sdu.nl/catalogus/97890121258953 Changing IT in six: http://www.vangorcum.nl/EN_toonBoek.asp?PublID=45524 Leading principles for IT related organisational change: http://www.slideshare.net/ldohmen/iba-frame-study-results-201004165 Individual IT projects and the general performance of IT projects in an organisation were part of the study. 4

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Value = (Align + Connect)2The average score way of steering (change-ability) represents the process perspective ofIBAFrame reflecting the key principles of IBAFrame. A level of steering of 4.3 leads to aresult of 1.9. A level of steering of 5.4 leads to a result of 4.6 etcetera (figure 2). The white line, representing the relation between result and process perspectives corresponds with the classical S-curve, very often used to visualize learning processes. Obviously an investment in development of knowledge and skills is necessary for value creation. Figure 2:Generic model for application of IBAFrame principlesThe results of the research ‘Leading principles for IT related organisational change’ are alsopublished in ‘Kampioen organisatieverandering’ 6 (2011, Dutch language). One of the mainfindings of this research is that 27 of the 46 IT projects (and/or situations) – this is 59% –achieve a result lower than 6.0. Only 3 projects (7%) come to a result of 8.0.Food for thought: Failed IT projectsThe failure of IT projects is often determined on the basis of exceeding the delivery dateand/or the available IT project budget. However, if budget and time exceeds 10% and theresult contributes to more efficient working business processes, higher turnover or highermargins, will we then refer to the project as a failed project? This classic approach on whetheror not a project was successful leads to a high level of narrow-mindedness in which theproject appears to be the objective on itself instead of the means to contribute to the corporateobjective. IBAFrame uses a different approach. The term (change) result is the exponent withwhich the result (of the change by means of IT) is expressed, instead of the budget and time.Summary‘Narrow streets breed narrow minds’. The limited and one-sided thinking from a technologypoint of view insufficiently contributes to the success rate of organisational changes where ITplays an important role. Only when these changes are approached from the total content oftechnology, organisation and people - TOP-mix - a proper analysis of the issue is possible andthe correct steering can be chosen. For this, people are needed who have competences fromseveral fields of expertise or know how bring them together. The concept of IBAFrame6 Kampioen organisatieverandering: http://www.unibook.com/nl/Leon-Dohmen/Kampioen-organisatieverandering 5

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Value = (Align + Connect)2provides insights from a result perspective and process perspective to create more value fororganisational change where IT plays an important role: Value = (Align + Connect)2.----------------------------------------------------------------------------------------------------------------- Leon Dohmen is principal management consultant at Logica. Also he teached Management of Technology at the Rotterdam Business School for Master- and MBA-programmes from 2003 to 2012. - http://www.linkedin.com/pub/leon-dohmen/0/b24/92 - 6